Zhou, Inc Is Planning Its Cash Needs for an Upcoming Period

question 49

Multiple Choice

Zhou, Inc. is planning its cash needs for an upcoming period when 85,000 machine hours are expected to be worked. Activity may drop as low as 78,000 hours if some overdue equipment maintenance procedures are performed; on the other hand, activity could jump to 94,000 hours if one of Zhou's major competitors likely goes bankrupt. A flexible cash budget to determine cash needs would best be based on:

• A) 78,000 hours.
• B) 85,000 hours.
• C) 94,000 hours.
• D) 78,000 hours and 94,000 hours.
• E) 78,000 hours, 85,000 hours, and 94,000 hours.